2016 0310 corporate_update_web

InfraREIT, Inc.Corporate Update

March 10, 2016

Safe Harbor

Forward Looking Statements

These presentations contain “forward-looking statements” about the business, financial performance, contracts, leases and prospects of InfraREIT, Inc. (the

“Company”). Words such as “could,” “will,” “may,” “assume,” “forecast,” “position,” “predict,” “strategy,” “guidance,” “outlook,” “target,” “expect,” “intend,” “plan,”

“estimate,” “anticipate,” “believe,” “project,” “budget,” “potential” or “continue” and similar expressions are used to ident ify forward-looking statements, although not all

forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions

about future events and are based on currently available information as to the outcome and timing of future events. This presentation also contains forward-looking

statements that have previously been publicly disclosed by the Company. These previously disclosed forward-looking statements should not be deemed reaffirmed or

updated by their inclusion in this presentation. The Company’s actual results, performance or achievements could differ materially from those expressed or implied by

any forward-looking statements made in connection with this presentation. The Company’s capabilities or performance, stockholder value as well as any other

statements that are not historical facts in this presentation are forward-looking statements that involve certain risks and uncertainties, many of which are difficult to

predict and beyond the Company’s control. Factors that could cause actual results to differ materially from the results contemplated by such forward-looking

statements include, without limitation, decisions by regulators or changes in governmental policies or regulations with respect to the Company’s permitted capital

structure, acquisitions and dispositions of assets, recovery of investments and authorized rate of return; the Company’s current reliance on its tenant for all of its

revenues and, as a result, the Company’s dependency on its tenant’s solvency and financial and operating performance; risks that the capital expenditures the

Company expects will not materialize for a variety of reasons; risks related to future lease negotiations or non-renewal of leases with the Company’s tenant; insufficient

cash available to meet distribution requirements; the Company’s ability to make strategic acquisitions that add to its rate base, including through acquisition of ROFO

Projects from Hunt Consolidated, Inc. and its subsidiaries; the price and availability of debt and equity financing; the Company’s level of indebtedness or debt service

obligations; cyber breaches, weather conditions or other natural phenomena; the effects of existing and future tax and other laws and governmental regulations; the

Company’s failure to qualify or maintain its status as a real estate investment trust (REIT); or changes in the tax laws applicable to REITs; the termination of the

Company’s management agreement or the loss of the services of the Company’s manager or other qualified personnel; and adverse economic developments in the

electric power industry or in business conditions generally, particularly in Texas. When considering forward-looking statements, you should keep in mind the risk

factors and other cautionary statements described under the heading “Risk Factors” included in the Company’s filings with the U.S. Securities and Exchange

Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from

those indicated. Forward-looking statements speak only as of the date made and reaffirmed, and the Company disclaims any obligation to update or revise any

forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Legend

This presentation contains certain financial measures that are not recognized under generally accepted accounting principles (GAAP). These non-GAAP measures

are presented because InfraREIT’s management believes they help investors understand InfraREIT’s business, performance and ability to earn and distribute cash to

its stockholders by providing perspectives not immediately apparent from net income. These measures are also measures frequently used by securities analysts,

investors and other interested parties in the evaluation of utilities, yieldcos and REITs. The presentation of Non-GAAP earnings per share (Non-GAAP EPS); cash

available for distribution (CAD); net income (loss) before interest expense, net, income tax expense, depreciation and amortization (EBITDA); Adjusted EBITDA; funds

from operations (FFO); and adjusted FFO (AFFO) in this presentation are not intended to be considered in isolation or as a substitute for, or superior to, the financial

information prepared and presented in accordance with GAAP. In addition, InfraREIT’s method of calculating these measures may be different from methods used by

other companies, and, accordingly, may not be comparable to similar measures as calculated by other companies that do not use the same methodology as InfraREIT.

Reconciliations of these measures to their most directly comparable GAAP measures are included in the Schedules 1-4 to this presentation.

2

Q4 2015 Performance Summary$ millions

3

Strong Q4 2015 performance, in line with expectations

Cash Available for Distribution

$16.3$19.0

Q4 2014 Q4 2015

+17%

Lease Revenue

$45.0$50.9

Q4 2014 Q4 2015

+13%

Adjusted EBITDA

$33.0$36.6

Q4 2014 Q4 2015

+11%

Full Year 2015 Performance Summary$ millions

4

Strong 2015 performance, in line with expectations

Cash Available for Distribution

$59.9

$72.6

2014 2015

Lease Revenue

$134.4$151.2

2014 2015

+13%

Adjusted EBITDA

$124.2$138.4

2014 2015

+11%

+21%

Full Year 2015 Performance – CAD / Share

5

IPO CAD / ShareForecast

Interest ExpenseSavings

Other 2015 CAD / Share

$0.12 $0.01 $1.20

(1)

(1) Forecasted 2015 interest expense, net in the IPO Prospectus ($35.9 million) less reported 2015 interest expense, net ($28.6 million) divided by 60.6 million shares

outstanding at December 31, 2015

$1.07

Adjusted EBITDAFull Year 2015 vs. Full Year 2014

6

2015 adjusted EBITDA exceeded 2014 adjusted EBITDA by 11%,

driven by growth in lease revenue

$ thousands 2015 2014

Increase/(Decrease)

$ %

Lease revenue $ 151,203 $ 134,415

G&A expense (64,606) (18,625)

Other income (expense), net 3,048 (17,236)

EBITDA 89,645 98,554

Non-cash reorganization structuring fee 44,897 —

Percentage rent adjustment — —

Base rent adjustment 6,538 6,688

Reorganization expenses 333 1,729

Other (income) expense, net (3,048) 17,236

Adjusted EBITDA $ 138,365 $ 124,207 $ 14,158 11%

Cash Available For DistributionFull Year 2015 vs. Full Year 2014

7

2015 CAD grew by 21% over 2014, reflecting growth in lease revenue

$ thousands, except share amounts 2015 2014

Increase/(Decrease)

$ %

Net income $ 19,931 $ 29,780

Depreciation 40,211 35,080


Percentage rent adjustment — —


Amortization of deferred financing costs 3,241 4,383


Non-cash equity compensation 678 120

Other (income) expense, net (3,048) 17,236

Capital expenditures to maintain net assets (40,211) (35,080)

Cash Available For Distribution (CAD) $ 72,570 $ 59,936 $ 12,634 21%

Shares outstanding (as of 12/31/2015) 60,594

CAD Per Share $ 1.20

CAD / Share Comparison to Non-GAAP EPSFull Year 2015

8

Non-GAAP EPS is presented as a metric to enable comparisons with other utilities.

CAD / share and Non-GAAP EPS will show some variances, but are expected to

approximate each other over time

$ thousands, except share amounts

CAD per

share

Non-GAAP

EPS

Net income $ 19,931 $ 19,931

Depreciation 40,211 —

Non-cash reorganization structuring fee 44,897 44,897

Percentage rent adjustment — — (1)


Amortization of deferred financing costs 3,241 —

Reorganization expenses 333 333

Non-cash equity compensation 678 —

Other income, net (3,048) —

Capital expenditures to maintain net assets (40,211) —

Total $ 72,570 $ 71,699

Shares outstanding 60,594 (2) 59,215 (3)

Per Share Amount $ 1.20 $ 1.21

(1) Adjustment will exist in quarterly reporting

(2) Outstanding shares as of December 31, 2015

(3) Weighted average common shares outstanding for the year ended December 31, 2015

Debt Obligations and Available Liquidity

9

Long-Term Debt (rate / maturity)

($ millions)

Outstanding

As of

December 31, 2015

TDC - Senior Secured Notes (8.50% / December 30, 2020) $ 18.8

SDTS - Senior Secured Notes (5.04% / June 20, 2018) (1) 60.0

SDTS - Senior Secured Notes, Series A (3.86% / December 3, 2025) (2) 400.0

SDTS - Senior Secured Notes (7.25% / December 30, 2029) 44.5

SDTS - Senior Secured Notes (6.47% / September 30, 2030) 101.6

Total $ 624.9

Liquidity Facilities

($ millions) Amount

Outstanding

As of

December 31, 2015 Available

InfraREIT Partners Revolver $ 75.0 $ — $ 75.0

SDTS Revolver 250.0 54.0 196.0

Total $ 325.0 $ 54.0 $ 271.0

Cash (as of December 31, 2015) 9.5

Total Available Liquidity $ 280.5

(1) Sharyland Projects (SP) debt used to fund construction of the CREZ Transmission assets was assumed by SDTS during December 2015

(2) $100.0 million of SDTS Senior Secured Notes, Series B were issued on January 14, 2016 at an interest rate of 3.86% per annum with a maturity of January 14, 2026

Financing Strategy

10

Focus on Regulated

T&D Opportunities

Maintain Strong Financial Profile

Grow Dividends

► Sign multi-year leases that reflect

regulated rate structure

► Minimize regulatory lag with prudent rate

case / TCOS filings

► 80% - 90% long-term CAD payout ratio

► Construct Footprint Projects

► Acquire ROFO Projects

► Opportunistically acquire T&D assets

► Maintain significant liquidity to support

capex plan and financial flexibility

► Maintain 55% debt to capitalization at our

regulated subsidiary, SDTS

► Target consolidated credit metrics of 60%

debt to capitalization and 12% AFFO to

debt

Initiating 2016 guidance metrics, based on footprint capital expenditures

CAD per share range $1.15 - $1.25

Non-GAAP EPS range $1.15 - $1.25

Dividends per share $1.00

• Quarterly dividend per share of $0.25 declared on March 2nd

Updating the estimate for footprint capital expenditure for 2016 – 2018 to a

range of $640 million - $740 million

Updating projected three-year compound annual growth rate (CAGR) range of

dividends per share of 8% - 10% from 2015 through 2018

Targeted payout ratio of 80% - 90%

Forward Outlook

11

Q1 2016 Dividend Increased 11%

12

2016 CAD Per

Share Range

2016 Annualized

Dividend

Per Share Payout Ratio

$1.00

$1.00

87%

83%

The 2016 annualized dividend is 11% higher than the annualized

2015 post-IPO dividend, representing an 83% payout ratio

at the midpoint of the 2016 CAD per share range

$1.15

$1.20

$1.25 $1.00 80%

2016E - 2018E Footprint Capital Expenditures (1)

$ millions

13

(1) Footprint Projects are transmission or distribution projects primarily situated within our distribution service territory, or that physically hang from our existing transmission assets

The forecast range of $640 million - $740 million for 2016 – 2018 has been

updated to reflect the estimated impact of ongoing oil price declines

2016 2017 2018

Base Distribution $70 - $75 $85 - $95 $70 - $90

Base Transmission $130 - $135 $70 - $80 $75 - $95

Base Footprint

Capex$200 - $210 $155 - $175 $145 - $185

Synchronous

Condensers$10 - $15 $45 - $50 $20 - $25

Second Circuit $10 - $15 $50 - $55 $5 - $10

Total Footprint

Capex$220 - $240 $250 - $280 $170 - $220

While the long-term fundamentals for the Texas economy remain strong, the ongoing oil price decline

is impacting activity and investment levels in West Texas

ERCOT reached a record peak demand of 69,877 MWs in August 2015

While at a slower pace, growth continues in the Permian / Midland Basin as it is one of the areas

where upstream and midstream companies continue to invest capital

“We expect the majority of our total 2016 spending will be allocated to our domestic oil and gas

business, primarily in the Permian Basin, with roughly 21% to be spent in Permian Resources and about

17% going toward Permian EOR.” – Oxy CFO, Feb. 4, 2016

“…capital expenditures of about $2 billion for 2016. That's down from our preliminary forecast in early

January from $2.4 to $2.6 billion and from actual spending in 2015 of 2.2.” – Pioneer CEO,

Feb. 10, 2016

“Based on current strip prices, our plan is to continue to drill and complete at a steady clip...Adding in

facilities and infrastructure capital, along with a few vertical wells, we expect to spend $380 million to

$430 million this year. And we project to generate production growth of around 40%, with oil growth

more like 60%.” – Parsley Energy, CEO, Feb. 26, 2016

“We expect to spend approximately $120 million to $140 million of growth capital in Texas, the majority

of which will be spent in the Permian Basin.” – EnLink Midstream CFO, Feb. 17, 2016

The multi-year extension of PTCs and bonus depreciation will provide ongoing support for

renewables development in the Panhandle

Texas Economic Overview

14

Texas Economic Overview (continued)

15

Permian oil production has continued to grow despite the declining oil price environment

Source: Energy Information Administration projected to March 1, 2016

Pipeline of Development Projects

16

Under Construction Other ROFO Additional Development Opportunities

NV

CA

OK

TX

AZNM

MEXICO

Additional U.S. –

Mexico DC Ties

Additional South Texas

Transmission / Generation

Interconnections

South Plains

Reinforcement

Southline

Transmission

Project

Verde Transmission

Project

Cross Valley

Transmission Line

Golden Spread

Electric Coop

(GSEC)

Interconnection

Lubbock Power & Light

Interconnection

ROFO projects are identified projects that are being developed by Hunt Consolidated, Inc. and its affiliates with respect to which

InfraREIT has a right of first offer.

ROFO Project UpdateAs of March 10, 2016

17

ROFO

ProjectState Estimated Costs (1) Status

Golden Spread TX$80 - $100 mm

(incl. financing)

• Expected completion in late Q1 or early Q2 2016; after

energization, expected to be owned by Sharyland (2)

• Hunt expects to offer to InfraREIT in the future

Cross Valley TX$160 - $185 mm

(incl. financing)

• Expected completion in late Q2 or early Q3 2016; after

energization, expected to be owned by Sharyland (2)

• Hunt expects to offer to InfraREIT in the future

SouthlineAZ

NM

~ $800 mm

(excl. financing)

• Final EIS (Environmental Impact Statement) in November

2015

• Achieved Phase 3 status in WECC (Western Electricity

Coordinating Council) ratings process in March 2015

• FERC (Federal Energy Regulatory Commission) granted a

PDO (Petition for Declaratory Order) in September 2015

• Open solicitation process anticipated to begin during the first

half of 2016

Verde NM$60 - $80 mm

(excl. financing)

• Easement agreements reached with three Native American

Pueblos

(1) Cost estimates are preliminary estimates, and include estimated financing costs for the Golden Spread Project and Cross Valley Project. For Southline,

Verde and other development projects other than the Golden Spread Project and Cross Valley Project, Hunt may opt to partner with other parties in the

development of projects depending on their scope, location and cost. The company publicly disclosed this information previously and is not updating or

reaffirming it as of March 3, 2016.

(2) Sharyland Utilities, L.P. is privately-owned by Hunter L. Hunt and other members of the family of Ray L. Hunt, and is managed by Hunter L. Hunt

Questions

18

Reg G Reconciliation

19

Schedule 1:

Reconciliation of Non-GAAP EPSQ4 2015 vs. Q4 2014

20

Non-GAAP EPS

InfraREIT defines non-GAAP net income as net income (loss) adjusted in a manner the Company believes is appropriate to show

its core operational performance, including: (a) adding back the non-cash reorganization structuring fee, (b) adding back the

reorganization expense related to the Company’s IPO and related reorganization transactions, (c) adding back the expense

related to the contingent consideration issued as deemed capital credits, (d) an adjustment for the difference between the amount

of percentage rent payments that the Company expects to receive with respect to the applicable period and the amount of

percentage rent the Company recognizes under GAAP during the period and (e) an adjustment for the difference between the

amount of base rent payments that the Company receives with respect to the applicable period and the amount of straight-line

base rent recognized under GAAP. The Company defines Non-GAAP EPS as non-GAAP net income divided by the weighted

average shares outstanding calculated in the manner described in the footnotes below.

The following table sets forth a reconciliation of net income attributable to InfraREIT, Inc. per diluted share to Non-GAAP EPS per

share for the three months ended December 31, 2015 and 2014:


Q4 2015

Amount Per Share (3)

Q4 2014


Net income attributable to InfraREIT, Inc. $ 19,806 $ 0.45 $ 2,924 $ 0.08

Net income attributable to noncontrolling interest 7,725 0.45 836 0.08

Net income 27,531 0.45 3,760 0.08

Non-cash reorganization structuring fee — — — —

Reorganization expenses — — 921 0.02

Contingent consideration — — 17,247 0.38

Percentage rent adjustment (1) (9,768) (0.16) (8,899) (0.19)

Base rent adjustment (2) 1,069 0.02 1,767 0.04

Non-GAAP net income $ 18,832 $ 0.31 $ 14,796 $ 0.32

Schedule 1:

Reconciliation of Non-GAAP EPSFull Year 2015 vs. Full Year 2014

21

Non-GAAP EPS

The following table sets forth a reconciliation of net income attributable to InfraREIT, Inc. per diluted share to Non-GAAP EPS per

share for the years ended December 31, 2015 and 2014:


2015


2014



Net income attributable to noncontrolling interest 6,664 0.41 6,882 0.65

Net income 19,931 0.34 29,780 0.65

Non-cash reorganization structuring fee 44,897 0.76 — —

Reorganization expenses 333 — 1,729 0.04


Percentage rent adjustment (1) — — — —

Base rent adjustment (2) 6,538 0.11 6,688 0.15


Schedule 1:

Reconciliation of Non-GAAP EPS

(1) Represents the difference between the amount of percentage rent payments and the amount recognized during the applicable

period, if any. Although the Company receives percentage rent payments related to each quarter, it does not recognize lease

revenue related to these percentage rent payments until its tenant’s annual gross revenues exceed minimum specified

breakpoints in the leases.

(2) This adjustment relates to the difference between the timing of cash based rent payments made under the Company’s leases

and when the Company recognizes base rent revenue under GAAP. The Company recognizes base rent on a straight-line

basis over the applicable term of the lease commencing when the related assets are placed in service, which is frequently

different than the period in which the cash rent becomes due.

(3) The weighted average common shares outstanding of 43.6 million was used to calculate net income attributable to InfraREIT,

Inc. common stockholders per diluted share. The weighted average redeemable partnership units outstanding of 17.0 million

was used to calculate the net income attributable to noncontrolling interest per share. The combination of the weighted

average common shares and redeemable partnership units outstanding of 60.6 million was used for the remainder of the per

share calculations.

(4) The weighted average shares outstanding of 35.1 million was used to calculate net income attributable to InfraREIT, Inc.

shareholders per diluted share. The weighted average redeemable partnership units outstanding of 10.6 million was used to

calculate the net income attributable to noncontrolling interest per share. The combination of the weighted average shares

and redeemable partnership units outstanding of 45.7 million was used for the remainder of the per share calculations.

(5) The weighted average common shares outstanding of 43.0 million was used to calculate net income attributable to InfraREIT,

Inc. common stockholders per diluted share. The weighted average redeemable partnership units outstanding of 16.2 million

was used to calculate the net income attributable to noncontrolling interest per share. The combination of the weighted

average common shares and redeemable partnership units outstanding of 59.2 million was used for the remainder of the per

share calculations.

(6) The weighted average shares outstanding of 35.1 million was used to calculate net income attributable to InfraREIT, Inc.

shareholders per diluted share. The weighted average redeemable partnership units outstanding of 10.5 million was used to

calculate the net income attributable to noncontrolling interest per share. The combination of the weighted average shares

and redeemable partnership units outstanding of 45.6 million was used for the remainder of the per share calculations.

22

Schedule 2:

Explanation and Reconciliation of CADQ4 2015 vs. Q4 2014

23

CAD

The Company defines CAD in a manner that it believes is appropriate to show its core operational performance, which includes a

deduction of the portion of capital expenditures needed to maintain its net assets which equals depreciation expense within the

applicable period. The portion of the capital expenditures in excess of depreciation, which the Company refers to as growth

capital expenditures, will increase its net assets. Also included in CAD are various other adjustments from net income, as outlined

below and described in more detail on Schedules 1, 3 and 4.

The following sets forth a reconciliation of net income to CAD for the three months ended December 31, 2015 and 2014:


Three Months Ended

December 31,

2015 2014

Net income $ 27,531 $ 3,760


Non-cash reorganization structuring fee — —

Percentage rent adjustment (1) (9,768) (8,899)

Base rent adjustment (2) 1,069 1,767

Amortization of deferred financing costs 805 1,190

Reorganization expenses — 921


Other (income) expense, net (3) (868) 17,569


CAD $ 18,954 $ 16,308

Shares Outstanding (mm of shares) 60.6 (4) 45.7 (5)

CAD Per Share $ 0.31 $ 0.36

Schedule 2:

Explanation and Reconciliation of CADFull Year 2015 vs. Full Year 2014

24

CAD

The following sets forth a reconciliation of net income to CAD for the years ended December 31, 2015 and 2014:

$ thousands, except share amounts Years Ended December 31,

2015 2014

Net income $ 19,931 $ 29,780



Percentage rent adjustment (1) — —


Amortization of deferred financing costs 3,241 4,383


Non-cash equity compensation 678 120

Other (income) expense, net (3) (3,048) 17,236


CAD $ 72,570 $ 59,936

Shares Outstanding (mm of shares) 60.6 (6) 45.7 (7)

CAD Per Share $ 1.20 $ 1.31

Schedule 2:

Explanation and Reconciliation of CAD

25

(1) See footnote (1) on Schedule 1 on Explanation and Reconciliation on Non-GAAP EPS

(2) See footnote (1) on Schedule 1 on Explanation and Reconciliation on Non-GAAP EPS

(3) Includes allowance for funds used during construction (AFUDC) on equity of $0.9 million and $(0.3) million for the three

months ended December 31, 2015 and 2014, respectively, and $3.0 million and $1.1 million for the years ended

December 31, 2015 and 2014, respectively.

(4) Consists of 43.6 million outstanding common shares of InfraREIT and 17.0 million outstanding OP Units held by the

limited partners of the Operating Partnership as of December 31, 2015.

(5) Consists of 35.1 million outstanding shares of InfraREIT and 10.6 million outstanding OP Units held by the limited

partners of the Operating Partnership as of December 31, 2014.

(6) Consists of 43.6 million outstanding common shares of InfraREIT and 17.0 million outstanding OP Units held by the

limited partners of the Operating Partnership as of December 31, 2015.

(7) Consists of 35.1 million outstanding shares of InfraREIT and 10.6 million outstanding OP Units held by the limited

partners of the Operating Partnership as of December 31, 2014.

Schedule 3:

Explanation and Reconciliation of EBITDA and Adjusted EBITDAQ4 2015 vs. Q4 2014

26

EBITDA and Adjusted EBITDA

InfraREIT defines EBITDA as net income (loss) before interest expense, net; income tax expense; depreciation and amortization.

Adjusted EBITDA is defined as EBITDA adjusted in a manner the Company believes is appropriate to show its core operational

performance, including: (a) adding back the non-cash reorganization structuring fee, (b) an adjustment for the difference between

the amount of percentage rent payments that the Company expects to receive with respect to the applicable period and the

amount of percentage rent the Company recognizes under GAAP during the period, (c) an adjustment for the difference between

the amount of base rent payments that the Company receives with respect to the applicable period and the amount of straight-line

base rent recognized under GAAP, (d) adding back the reorganization expense related to the Company’s IPO and related

reorganization transactions and (e) adjusting for other income (expense), net.

The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the three months ended

December 31, 2015 and 2014:

$ thousands

Three Months Ended

December 31,

2015 2014

Net income $ 27,531 $ 3,760

Interest expense, net 7,470 8,377

Income tax expense 374 297


EBITDA 46,148 21,689






Adjusted EBITDA $ 36,581 $ 33,047

(1) See footnote (1) on Schedule 1 on Explanation and Reconciliation of Non-GAAP EPS


(3) See footnote (3) on Schedule 2 on Explanation and Reconciliation of CAD

Schedule 3:

Explanation and Reconciliation of EBITDA and Adjusted EBITDAFull Year 2015 vs. Full Year 2014

27

EBITDA and Adjusted EBITDA

The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the years ended

December 31, 2015 and 2014:

$ thousands Years Ended December 31,

2015 2014

Net income $ 19,931 $ 29,780

Interest expense, net 28,554 32,741

Income tax expense 949 953


EBITDA 89,645 98,554






Adjusted EBITDA $ 138,365 $ 124,207




Schedule 4:

Explanation of FFO and AFFO

28

FFO and AFFO

The National Association of Real Estate Investment Trusts (NAREIT) defines FFO as net income (computed in accordance with

GAAP), excluding gains and losses from sales of property (net) and impairments of depreciated real estate, plus real estate

depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated

partnerships and joint ventures. Applying the NAREIT definition to the Company’s consolidated financial statements, which is the

basis for the FFO and the reconciliations below, results in FFO representing net (loss) income before depreciation, impairment of

assets and gain (loss) on sale of assets. FFO does not represent cash generated from operations as defined by GAAP and it is

not indicative of cash available to fund all cash needs, including distributions.

AFFO is defined as FFO adjusted in a manner the Company believes is appropriate to show its core operational performance,

including: (a) adding back the non-cash reorganization structuring fee, (b) an adjustment for the difference between the amount of

percentage rent payments that the Company expects to receive with respect to the applicable period and the amount of

percentage rent the Company recognizes under GAAP during the period, (c) an adjustment for the difference between the amount

of base rent payments that the Company receives with respect to the applicable period and the amount of straight-line base rent

recognized under GAAP, (d) adding back the reorganization expense related to the Company’s IPO and related reorganization

transactions and (e) adjusting for other income (expense), net.

Schedule 4:

Reconciliation of FFO and AFFOQ4 2015 vs. Q4 2014

29

FFO and AFFO

The following table sets forth a reconciliation of net income to FFO and AFFO for the three months ended December 31, 2015 and

2014:

$ thousands

Three Months Ended

December 31,

2015 2014

Net income $ 27,531 $ 3,760


FFO 38,304 13,015






AFFO $ 28,737 $ 24,373




Schedule 4:

Reconciliation of FFO and AFFOFull Year 2015 vs. Full Year 2014

30

FFO and AFFO

The following table sets forth a reconciliation of net income to FFO and AFFO for the years ended December 31, 2015 and 2014:

$ thousands Years Ended December 31,

2015 2014

Net income $ 19,931 $ 29,780


FFO 60,142 64,860






AFFO $ 108,862 $ 90,513




Appendix

31

Attractive Asset Profile

Transmission

► ~75% of our rate base is

transmission

► ~665 miles of transmission lines

► Transmission Operations Center

► Railroad DC Tie with Mexico

(300 MW)

Distribution

► ~25% of our rate base is distribution

► ~12,300 miles of distribution lines

► ~53,000 electric delivery points

As of December 31, 201532

Disciplined, Multi-faceted Pursuit of Growth

33

Footprint Projects

(Funded by InfraREIT)

Hunt development

team members are

experienced T&D

planners

ROFO Projects

Growth Strategy Growth Drivers

• Population and economic growth across Texas

• Energy-driven economic expansion

• Generator interconnections to Panhandle

Transmission assets

• Specific Hunt T&D projects in development,

under construction or in operations

• The Golden Spread Project and Cross Valley

Project are expected to be offered to InfraREIT in

the future

• Value enhancing M&A Transactions that build on:

• Hunt’s industry relationships and reputation

• Expertise with REIT structure

• Future T&D projects developed and constructed

by Hunt

• Primarily focused on Texas and the Southwest

Other Hunt

Development Projects

Acquire other T&D assets

from third parties

SDTS (2)

Structure Mechanics

34

SDTS owns our T&D

assets and leases them

to Sharyland

Sharyland collects rate-

regulated revenue from

other utilities and retail

electric providers

Sharyland makes regular

lease payments to SDTS

InfraREIT pays dividends

to stockholders

1

2

3

4

Shareholders

InfraREIT (1)

Hunt Family

Sharyland

Utilities

Customers

T&D Services Cash

Lease

Rent

1

2

3

4 Ownership (3)

Hunt Manager

Hunt Developer

100% Interest

(1) Represents InfraREIT, Inc., InfraREIT Partners, LP (Operating Partnership) and Transmission and Distribution Company,

L.L.C. (TDC)

(2) Represents Sharyland Distribution & Transmission Services, L.L.C. (SDTS)

(3) Represents Hunt Transmission Services, L.L.C. (limited partner of the Operating Partnership and shareholder of InfraREIT)

Conducted business as a REIT since 2010

Hunt

Consolidated,

Inc.

Board Structure

Management

Related Party

Transactions

Management

Agreement

9 total members, 6 independent

CEO, CFO and General Counsel are officers of InfraREIT and Hunt

Manager

Require majority approval by the independent board members (i.e.

ROFO Project acquisitions)

Responsible for the day-to-day business and legal activities of

InfraREIT

Annual base fee equal to $14.0 million for April 1, 2016 through March

31, 2017 representing 1.50% of total book equity as of year end 2015

Capped at $30 million per year

Incentive fee equal to 20% of quarterly dividends per share in excess

of the threshold distribution amount payable quarterly

2016 dividend per share: $0.25

Threshold dividend: $0.27

Governance and Management

35

Lease Mechanics

36

Lease Objectives

InfraREIT

► Rent payments intended to

provide InfraREIT with

approximately 97% of the

projected regulated return on

rate base attributable to

InfraREIT’s assets

Sharyland

► Sharyland recovers operating

and maintenance (O&M) costs

and a portion of the return on

InfraREIT’s rate base

Lease Terms

► InfraREIT is obligated to fund

capex for Footprint Projects

► New assets are added to

leases through supplements

► Lease renewals apply the same

methodology but are updated

for new rate case information

► Approximately 80% – 90% of

rent is a fixed amount – paid

monthly

► Approximately 10% – 20% of

rent is variable based on a

percentage of Sharyland’s

gross revenue less adjustments

– paid quarterly

Q4 2015 Results

37

Non-GAAP EPSQ4 2015 vs. Q4 2014

38

Non-GAAP EPS per diluted share was lower in Q4 2015 than Q4 2014 by 3%,

due to increased lease revenues offset by higher weighted average common shares

outstanding during Q4 2015 compared to Q4 2014


Q4 2015

Amount Per Share

Q4 2014

Amount Per Share


Net income attributable to noncontrolling

interest7,725 0.45 836 0.08

Net income 27,531 0.45 3,760 0.08

Non-cash reorganization structuring fee — — — —

Reorganization expenses — — 921 0.02


Percentage rent adjustment (9,768) (0.16) (8,899) (0.19)

Base rent adjustment 1,069 0.02 1,767 0.04


Cash Available For Distribution Q4 2015 vs. Q4 2014

39

CAD grew by 17% over Q4 2014, reflecting growth in lease revenue

$ thousands, except share amounts Q4 2015 Q4 2014

Increase/(Decrease)

$ %

Net income $ 27,531 $ 3,760



Percentage rent adjustment (9,768) (8,899)


Amortization of deferred financing costs 805 1,190



Other (income) expense, net (868) 17,569


Cash Available For Distribution (CAD) $ 18,954 $ 16,308 $ 2,646 17%

Shares outstanding (as of 12/31/2015) 60,594

CAD Per Share $ 0.31

Adjusted EBITDA Q4 2015 vs. Q4 2014

40

Q4 2015 adjusted EBITDA exceeded Q4 2014 adjusted EBITDA by 11%,

driven by growth in lease revenue

$ thousands Q4 2015 Q4 2014

Increase/(Decrease)

$ %

Lease revenue $ 50,921 $ 45,044

G&A expense (5,641) (5,786)

Other income (expense), net 868 (17,569)

EBITDA 46,148 21,689


Percentage rent adjustment (9,768) (8,899)



Other (income) expense, net (868) 17,569

Adjusted EBITDA $ 36,581 $ 33,047 $ 3,534 11%

2016 0310 corporate_update_web

Investor Relations